At the end of the trading session on October 11, 2024, the world coffee market recorded remarkable developments. Robusta coffee prices on the London floor ended a month-long decline and recovered, while Arabica coffee prices continued to increase slightly. The domestic coffee market also reflected this trend, with slight increases in some localities.
However, amid these positive signals, the coffee market is still affected by many unstable factors, making short-term price forecasts difficult.
Robusta's Recovery: Is It a Positive Signal?
Robusta coffee prices have bounced back from a one-month low, a positive sign for the market. The reason is believed to be that demand for Robusta coffee remains stable, while supply is showing signs of being limited.
According to the International Coffee Organization (ICO), Robusta coffee prices are moving closer to Arabica coffee prices, something that rarely happened before, while coffee exports in major global markets continue to skyrocket to record levels.
However, Robusta's recovery needs to be viewed with caution.
Firstly, Robusta prices have yet to recover from their six-month lows, suggesting that the market has yet to fully recover. Secondly, there is still a surplus of Robusta coffee in some countries, especially Vietnam, the world's largest producer of Robusta coffee.
Arabica still up slightly, but held back
Arabica coffee rose for a second straight session, indicating strong demand for the bean, but gains were capped by a weaker Brazilian real.
The devaluation of the Real has led to increased selling by Brazilian coffee producers, putting downward pressure on Arabica prices. In addition, the drought in Brazil remains a major concern. Although rains are forecast in the coming weeks, the damage caused by the drought has not yet been fully repaired.
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| Coffee price forecast tomorrow 10/12/2024: What is affecting the coffee market? |
Domestic coffee prices increased slightly in some localities, by an average of VND100/kg. However, this price increase still cannot fully reflect the complex developments in the international coffee market.
In particular, the fact that the price of fresh coffee at the beginning of this year’s crop has reached a record high in many years, reaching VND20,000/kg in Dak Lak and Dak Nong, is a worrying sign. This shows that the cost of coffee production is increasing, which could lead to upward pressure on prices in the domestic market in the coming time.
Coffee prices forecast to continue rising but risks remain
Based on the above analysis, coffee prices tomorrow, October 12, 2024, may continue to increase slightly, but risks still exist. The recovery of Robusta may be a bright spot, but it is necessary to note the potential risks from drought in Brazil and low coffee production in Vietnam.
Meanwhile, Arabica is likely to continue its modest gains, but gains will be capped by the depreciation of the Brazilian Real. Domestic coffee markets may also see modest gains, but the risk of rising production costs is a significant concern.
For investors, businesses and farmers interested in the coffee market, they should closely monitor market developments, especially information on rains in Brazil and coffee production in Vietnam to make appropriate investment decisions. In addition, they need to carefully consider buying and selling coffee, avoid buying high and selling low and need to find ways to cope with complex changes in the market.
*Information for reference only.
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